Specifically, in April 2007, GOEL obtained
Inside Information regarding Intel's earnings announcement for the quarter
ending in March 2007 from a colleague who worked at Intel. GOEL provided this
Inside Information to RAJARATNAM on Friday, April 13, 2007, at which time
Galleon Tech held a short position of approximately 1,150,000 shares of Intel
common stock (worth approximately $23.5 million). Intel was scheduled to announce
its quarterly earnings on Tuesday, April 17, 2007.

Between April 13 and April 17, 2007, after
receiving the Inside Information from GOEL, RAJARATNAM caused Galleon Tech to
cover its entire short position in Intel common stock and to purchase approximately
1.72 million additional shares of Intel common stock (worth approximately $36
million). These trades changed Galleon Tech's position in Intel common stock
from short approximately $23.5 million to long approximately $36 million -- a
swing of approximately $59.5 million -- in the three business days preceding
Intel's earnings announcement. In addition, on April 17, 2007, RAJARATNAM also
caused Diversified to purchase approximately 250,000 shares of Intel common stock.

Goel also provided Rajaratnam with information related to a
pending Intel joint venture. According
to the complaint
from the SEC, Rajaratnam bought stock on Goel’s behalf and presumably as a payoff for the information that Goel provided.

Galleon is a continuing object lesson for a new generation of
investors and Rajaratnam is fast becoming the Ivan Boeksy of this
generation. Of course, the US attorney
probably got lucky here. Without a
wiretap, both of the charges against Goel could have been hard to make
stick.

First, the trading in advance of the announcement of the Intel
joint venture: Rajaratnam received the
information and bought months in advance of the announcement. That’s not the kind of thing that gets easily
noticed and there are plenty ways to explain that away if pressed.

Second, the trading in advance of an earnings release. Well, the timing of earnings releases are
like the phase of the moon – they’re highly predictable. And, when pressed it should be relatively easy
for an investor like Rajaratnam to make a case that he had been following Intel
for some time and could justify a purchase/sale prior to earnings.

On the other hand, if you’re going hand out inside information
business school classmates about the company you’re working for, rest assured that
the SEC knows where you went to school.
Also, if your business school buddy is buying shares of Hilton in your
name and you’ve not sent him a check, it doesn’t take a genius to figure out
what’s going on.